AUD/USD: Trading the Australian GDP Jun 2013

AUD/USD: Trading the Australian GDP Jun 2013

Australian  Gross Domestic Product (GDP) is a key release and is published each quarter. GDP measures production and growth of the economy, and is considered by analysts as one the most important indicators of economic activity. A reading which is better than the market forecast is bullish for the Australian dollar.

Here are all the details, and 5 possible outcomes for AUD/USD.

Published on Wednesday at 1:30 GMT.

Indicator Background

Australian GDP is a key economic indicator, and provides an excellent indication of the health and direction of the  Australian economy. Traders should pay close attention to this release, as an unexpected reading could affect the direction of AUD/USD. The indicator  has been steady in recent releases, and posted a gain of 0.6% in Q4 of 2012, which matched the forecast.  The markets are expecting a slight improvement for Q1, with an estimate of a 0.8% gain. Will GDP meet or beat this prediction?

Sentiments and levels

The Australian  dollar  had a disastrous  May, losing eight cents last month.  AUD/USD has posted sharp gains to start the week, but the upward momentum  could prove to be just a  temporary blip. Retail Sales missed the estimate, and a weak GDP  reading could quickly snuff out this upward rally.  Also, if the RBA does cut rates once again, the Aussie will likely take a hit. So, the overall sentiment is bearish on GBP/USD towards this release.

Technical levels, from top to bottom: 1.00, 0.9913, 0.9797, 0.9549, 0.9405, and 0.9275.

5 Scenarios

  1. Within expectations:  0.6% to 1.0%. In such a scenario, AUD/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 1.1% to 1.4%: An unexpected higher reading can push the pair above one  resistance line.
  3. Well above  expectations: Above 1.4%: An surge in the reading  would likely boost the Aussie, and the pair could break a second line of         resistance as a result.
  4. Below expectations: 0.2% to 0.5%: In this scenario, AUD/USD could drop below one support level.
  5. Well below  expectations: Below 0.2%. A very weak reading could hurt the  Australian dollar, and the pair could fall below a second level of support.

For more on the pound, see the AUD/USD forecast.

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Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.